Jeremy BraginThe implied probability formula
Every odds format hides the same number. Here is how to get it out of each.
- Prediction market price: probability = the price in dollars. 62¢ is 62%.
- Decimal odds D: probability = 1 ÷ D. Odds of 2.50 are 40%.
- American +A: probability = 100 ÷ (A + 100). +150 is 40%.
- American −A: probability = A ÷ (A + 100). −150 is 60%.
- Fractional N/D: probability = D ÷ (N + D). 3/2 is 40%.
A worked example with a live price
Take a market trading right now. Its price converts to every other format like this.
Will David Lisnard win the 2027 French presidential election? trades at 11.0¢ right now. That is a 11.0% implied probability: the same as American +809, decimal 9.09 or fractional 89/11.
Implied probability conversion table
Common prices in every format. On a prediction market, cents and percentages are the same number.
| Price | Implied probability | American | Decimal | Fractional |
|---|---|---|---|---|
| 10¢ | 10.0% | +900 | 10.00 | 9/1 |
| 20¢ | 20.0% | +400 | 5.00 | 4/1 |
| 25¢ | 25.0% | +300 | 4.00 | 3/1 |
| 33.3¢ | 33.3% | +200 | 3.00 | 2/1 |
| 40¢ | 40.0% | +150 | 2.50 | 3/2 |
| 50¢ | 50.0% | +100 | 2.00 | 1/1 |
| 60¢ | 60.0% | -150 | 1.67 | 2/3 |
| 66.7¢ | 66.7% | -200 | 1.50 | 1/2 |
| 75¢ | 75.0% | -300 | 1.33 | 1/3 |
| 80¢ | 80.0% | -400 | 1.25 | 1/4 |
| 90¢ | 90.0% | -900 | 1.11 | 1/9 |
Why sportsbook odds add up to more than 100%
A sportsbook quotes both sides of a game. If each side is −110, each implies 52.4%, for 104.8% in total.
The extra 4.8% is the book's margin, often called the vig or overround. You pay it whichever side you take.
A prediction market has no house on both sides. Yes and No add up to about $1, and the cost shows up as the spread and the fee instead.
How to remove the vig
To get a sportsbook's fair probability, divide each side by the total.
With −110 on both sides, 52.4% divided by 104.8% is 50%. That is the book's own estimate once its margin is gone.
Compare that with a prediction market's price for the same outcome. A gap of a few points is where traders look for value.
Using implied probability to find value
A price is only good or bad against your own estimate. If you think an outcome is 70% likely and it trades at 62¢, it looks cheap.
Expected value makes that exact. Your probability times $1, minus the price, minus the fee, is your expected gain per contract.
At 70% and 62¢, that is 8¢ a contract before fees. On Kalshi, the fee at 62¢ is under 2¢ a contract.
Fees move your break-even too. A 62¢ contract with a 2¢ fee has to win about 64% of the time just to break even.
Be honest about your edge. Most traders overrate their own estimates, and busy markets are usually well calibrated.
Where you see implied probability on CoinStats
Every headline percentage on our odds pages is an implied probability.
On cross-venue pages, it is the average across every venue that quotes the question, labelled with the venue count.
To convert any format yourself, use the odds converter. For the bigger picture, read what prediction markets are.